Almost every equipment supplier I have bumped into these last 12 to
18 months, from New York to San Diego, has been saying the same thing:
The botoom has dropped out of the business. Lots of guys and gals out
there are really starting to sweat the payments on the Porsche. They
are wondering if the good old days of the late '70s and early
'80s will ever come back.

Sorry to say, they won't. But there are still a lot of
lucrative opportunities out there; perhaps even more than there ever
were. However, taking advantage of them will require the captains of the
interconnect world to bring their ships hard about. Naturally, I have
some ideas for them to consider.

First, let's take a look at why the interconnect business is
becalmed. The chief cause is that the interconnect industry built its
business on too narrow a base. It has, then and now, catered to only a
small segment of the buying public; those business people who, for one
reason or another, could not abide the Bell System.

Some of those people were simply penny-pinchers. Others were free
spirits who disliked being force-fed only what the Bell System deigned
to tariff. And a lot of them were what I call telephiles, the folks who
dearly loved their telephone and couldn't get enough bells,
whistles and buzzers our of AT&T to keep them happy.

What a splendid market they were! If a prospect was a
penny-pincher, an interconnect vendor sold him on least-cost routing,
queuing and capital amortization. For the telephiles, the vendor hauled
out * and # and FLASH and snazzy-looking electronic sets. And those who
were chafing under AT&T's benign (?) despotism were
offered--well, freedom.

This market represented a pent-up demand. A demand that has now
been met, by and large. As of mid-1983, the bulk of the people who
wanted to buy, bought. Now the interconnects are facing a bunch of
tough customers; the people who liked the Bell System and saw nothing
wrong at all with the old rent-it-forever scheme. These people were
happy with the status quo and many of them are actually unhappy with the
interconnect industry for upsetting the apple cart. If you doubt this,
thumb through some back issues of Business Week, Forbes, Time, Newsweek
and The Wall Street Journal and compare the number of favorable versus
unfavorable comments about DDD (divestiture, deregulation and
detariffing). You will see the same thing that I saw: Most business
people were against it.

Want a profile on these people? OK. They re the one who really,
truly loved the Bell System and will only be dragged into an
interconnect system kicking and screaming. They don't pinch any
pennies; they never did. Further, they are telephobes (who, in contrast
to the telephile, couldn't care less about such things as LCD
displays, RS-232 plugs built into the set base, and having 50 million
programmable feature buttons winking away).

Even worse, they not only didn't mind having their hands held
by AT&T, they liked it that way. Since Day One, they were happy to
send in a monthly check in the amount of money the Bell System said was
a reasonable rate for the service they got. All they ever asked in
return was that there be dial tone whenever the handset came off of the
cradle, and that they never had to concern themselves with details of
how it was done.

I tell you truly, when I started in this business over 20 years
ago, I found that for every customer who gave me the bum's rush because I was from the Telephone Company, there were at least 10 others
who greeted me with open arms and bought what I was pitching without so
much as a peep.

Those people knew that telecommunications was vital to their
businesses; they weren't dummies. It was just that they had
more-pressing issues on their minds. They decided that having the
Telephone Company take care of everything for a monthly fee was an
equitable arrangement for them. Hey, whether we would agree or not, it
was a legitimate business decision on their part.

Of course, those folks are still out there. In fact, they
constituted the largest percentage of the phone-buying public in 1985.
I know, because they are the ones who hire consultants. When they can
no longer avoid the issues of waste and inefficiency, they retain people
like me to help them deal with the interconnect vendors.

The typical equipment salesperson has called on a ton of people
like this. Only most gave up as soon as they sensed the telephobe
mindset and went out looking for the guy whose tongue is hanging out for
a 5,000-line system.

So, to my friends in the equipment business, on behalf of some
users, listen to your friendly old consultant for a minute. Here's
an idea on how to get next to these tough customers and close a sale:
Copy the Bell System. As an alternative to the conventional purchase or
lease/purchase plans that have been your mainstay all these years, have
your marketing department offer a comprehensive rental plan. Yes, you
heard me right, a rental plan. Here is a rough outline of what such a
plan should contain:

* The thing to be offering is a grade of service (or performance
criteria, call it what you will), not hardware. The contract should
contain what is basically a schedule of benefits--results agreed to be
provided--and a set monthly fee for providing them. At the conclusion
of the contract, the offer should be to either re-up, sell the customer
the in-place system, or pull everthing out and go away.

* Hardware will be almost incidental. Because the interconnect
vendor would be paid for performance, it would have broad discretion as
to the hardware it employs to meet the criteria. This way it
doesn't get tangled up with endless widget counting and finger
pointing over who forgot to order what.

* The sales rep should be paid a monthly residual for the life of
each contract sold, and a bonus for getting the customer to re-up.

That way, it's possible to afford having the rep stay on the
account until the Infernal Pit freezers over and provide the sort of
continuity customers are just dying for. Few things are as galling to a
customer as seeing the person who sold the system bow out of the picture
the day after the cutover and the customer then being turned over to an
installed-base rep.

Some Services the Contract Might Include

* Because there will be a monthly fee charged for services
rendered, the contract can provide for such things as all the SMDR processing the customer wants, monthly status reports and traffic
studies, automatic updating of the LCR whenever carriers set new rates
or offer new services, and specific technicians assigned to the account
and allowed to accept field orders from the customer. The contract also
can provide for computerized plant records (of course, that ought to be
done anyway, simply to keep costs down), and for comprehensive agency
agreements to deal with the telco and all other carriers, and for
picking up the tab for all site preparation. The agreement further can
include training, training and more training, anytime the customer wants
it--or needs it--plus exhaustive system-design efforts, so when the
system cuts over, it works just the way everyone wants it to work.

* At least one customer employee should be trained to act as a
liaison and that person should be given a computer terminal to enter
work orders directly into the supplier's computer.

* Every six months or so, the account rep should go out to the
customer's premises to do "usage prospecting" (I just
love that old Bell term).

* The supplier should beef up its engineering staff, because if
it's going to successfully manage an account on this kind of a
basis, a rep can't do it alone.

* After usage prospecting has been done, the account rep should
hand-carry a report in to the customer. The report should show the
status of the system, spot any potential problems the customer may
encounter, and offer recommendations for any improvements that could be
made. The report should be developed jointly by the account rep, an
engineer and the plant technician in charge of the account. All three
should sign it, too. (Note: Unless the recommendations call for capital
outlay on the vendor's part, the costs of implementing them should
be anticipated in the monthly fee so that they can be made without any
additional charge.)

Without belaboring the obvious, people assigned to an account like
this should be the best. While most vendors insist their reps look and
act the part of a professional, the plant people hanging out of their
mouths. These are no-nos. To make a program like this work, they are
going to have to be polished and professional from the top down.

Well, there you have it. No guarantees that a rental program like
this will land every account in town, but five will get you 10 that a
few will be snared with it.

COPYRIGHT 1986 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.